Mitchells & Butlers PLC (LSE:MAB) shares are down over 20% since Labour came into power and Wednesday's upbeat trading statement was a relief, according to Shore Cap.
Trading was resilient with like-for-like sales growth of 4% after 15 weeks consistent with prior trends, the broker’s full-year assumptions and ongoing market outperformance.
Buoyant Christmas trading has been mitigated since by the recent adverse weather.
In its outlook, MAB pointed towards continued profit growth this year, which would chime with Shorecap’s expectation of £5 million increase in underlying profit to £317m million, which is unchanged.
On a price-to-book measure, Shorecap notes that MAB is trading on levels last seen during the financial crash, Ukraine invasion and the Covid lockdown adding that today’s update highlights the group’s underlying resilience.
Buy is the recommendation. Shares were up 5.5% at 240p.